Chapter 1 Chuong 2

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Chapter 1 - chương 2
Đầu tư tài chính - Trắc nghiệm - Cao học (Trường Đại học Kinh tế Thành phố Hồ Chí
Minh)
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CHAPTER 1
1. The material wealth of a society is a function of _________.
A. all financial assets
B.all real assets
C. all financial and real assets
D. all physical assets
E. all commodities
2. _______ is/are a real asset(s).
A. Only land
B. Only machines
C. Only stocks and bonds
D. Only knowledge
E.Land, machines and knowledge are real assets
3. The means by which individuals hold their claims on real assets in a well-developed economy
are
A. Investment assets.
B. Depository assets.
C. Derivative assets.
D.Financial assets.
E. Exchange-driven assets.
4. _______ is/are financial assets.
A. Only bonds
B. Only machines
C. Only stocks
D.Stocks and bonds

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E. Knowledge
5. _________ financial asset(s).
A. Buildings are
B. Land is a
C. Derivatives are
D. U.S. Agency bonds are
E.Derivatives and U.S. Agency bonds are
6. Financial assets ______.
A. directly contribute to the country's productive capacity
B.indirectly contribute to the country's productive capacity
C. contribute to the country's productive capacity both directly and indirectly
D. do not contribute to the country's productive capacity either directly or indirectly
E. are of no value to anyone
7. In 2009, ____________ was the most significant real asset of Taiwanese households in terms
of total value.
A. consumer durables and semi-durables
B. foreign assets
C.real estate
D. mutual funds
E. loans
8. In 2009, Currency and ____________ were the least significant financial assets of Taiwanese
households in terms of total value.
A. real estate
B. mutual funds
C. life insurance reserves

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D.debt securities and other
E. pension fund reserves
9. In 2009, ____________ was the most significant financial asset of Taiwanese households in
terms of total value.
A. real estate
B. mutual funds
C. debt securities and other
D. life insurance reserves
E.deposits
10. In 2009, ____________ was the most significant asset of Taiwanese households in terms of
total value.
A.real estate
B. mutual funds
C. debt securities and other
D. life insurance reserves
E. pension fund reserves
11. In 2009, ____________ was the most significant liability of Taiwanese households in terms
of total value.
A. foreign liabilities
B.loans
C. accounts payable
D. real estate
E. other debt
12. Which of the following financial assets made up the greatest proportion of the financial
assets held by Taiwanese households?
A.Deposits

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B. Life insurance reserves
C. Mutual funds
D. Debt securities and other
E. Personal trusts
13. In 2009, _______ of the total assets of Taiwanese households were domestic financial
assets.
A. 20.4%
B. 34.2%
C.56.5%
D. 71.7%
E. 82.5%
14. The largest component of domestic net worth of Taiwan in 2009 was ____________.
A. equipment
B.real estate
C. other assets
D. consumer durables and semi-durables
E. inventories
15. The smallest component of domestic net worth of Taiwan in 2009 was ____________.
A. equipment
B. real estate
C.other assets
D. consumer durables and semi-durables
E. inventories
16. The national net worth of Taiwan in 2009 (in NT$ 100 million) was _________.
A. NT$154,111

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B. NT$264,387
C. NT$426,698
D.NT$1,302,656
E. NT$1,709,836
17. A fixed-income security pays ____________.
A. a fixed level of income for the life of the owner
B.a fixed stream of income or a stream of income that is determined according to a specified
formula for the life of the security
C. a variable level of income for owners on a fixed income
D. a fixed or variable income stream at the option of the owner
E. a riskless return that is fixed for life
18. A debt security pays ____________.
A. a fixed level of income for the life of the owner
B. a variable level of income for owners on a fixed income
C. a fixed or variable income stream at the option of the owner
D.a fixed stream of income or a stream of income that is determined according to a specified
formula for the life of the security
E. a riskless return that is fixed for life
19. Money market securities ____________.
A. are short term
B. are highly marketable
C. are generally very low risk
D.are short term, highly marketable, and generally very low risk
E. highly marketable and generally very low risk
20. An example of a derivative security is/are ______.

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A. a common share of Microsof
B. an Intel bond
C.a commodity futures contract and a call option on Intel stock
D. a call option on Intel stock and an Intel bond
E. a common share of Intel stock
21. The value of a derivative security _______.
A.depends on the value of the related security
B. is unable to be calculated
C. is unrelated to the value of the related security
D. has been enhanced due to the recent misuse and negative publicity regarding these
instruments
E. is worthless today
22. Although derivatives can be used as speculative instruments, businesses most ofen use
them to
A. attract customers.
B. appease stockholders.
C. offset debt.
D.hedge risks.
E. enhance their balance sheets.
23. Financial assets can permit all of the following except ____________.
A. consumption timing
B. allocation of risk
C. separation of ownership and control
D.elimination of risk
E. easy transfer of ownership

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24. The ____________ refers to the potential conflict between management and shareholders.
A.agency problem
B. diversification problem
C. liquidity problem
D. solvency problem
E. regulatory problem
25. A disadvantage of using stock options to compensate managers is that
A. it encourages mangers to undertake projects that will increase stock price.
B. it encourages managers to engage in empire building.
C.it can create an incentive for mangers to manipulate information to prop up a stock price
temporarily, giving them a chance to cash out before the price returns to a level reflective of the
firm's true prospects.
D. it causes managers to take undue risks.
E. it causes managers to be too conservative.
26. Which of the following are mechanisms that have evolved to mitigate potential agency
problems?I) Compensation in the form of the firm's stock optionsII) Hiring bickering family
members as corporate spiesIII) Underperforming management teams being forced out by
boards of directorsIV) Security analysts monitoring the firm closelyV) Takeover threats
A. II and V
B. I, III, and IV
C.I, III, IV, and V
D. III, IV, and V
E. I, III, and V
27. Corporate shareholders are best protected from incompetent management decisions by
A. the ability to engage in proxy fights.
B. management's control of pecuniary rewards.

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C. the ability to call shareholder meetings.
D.the threat of takeover by other firms.
E. one-share/one-vote election rules.
28. Theoretically, takeovers should result in ___________.
A. improved management
B. increased stock price
C. increased benefits to existing management of taken over firm
D.improved management and increased stock price
E. worse management and decreased stock price
29. During the period between 2000 and 2002, a large number of scandals were uncovered.
Most of these scandals were related toI) Manipulation of financial data to misrepresent the
actual condition of the firm.II) Misleading and overly optimistic research reports produced by
analysts.III) Allocating IPOs to executives as a quid pro quo for personal favors.IV) Greenmail.
TA. II, III, and IV
B. I, II, and IV
C. II and IV
D. I, III, and IV
E.I, II, and III
30. The Sarbanes-Oxley Act ____________.
A. requires corporations to have more independent directors
B. requires the firm's CFO to personally vouch for the firm's accounting statements
C. prohibits auditing firms from providing other services to clients
D. requires corporations to have more independent directors and requires the firm's CFO to
personally vouch for the firm's accounting statements
E.requires corporations to have more independent directors and requires the firm's CFO to
personallyvouch for the firm's accounting statements, prohibits auditing firms from providing

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other services to clients, and requires corporations to have more independent directors and
requires the firm's CFO to personally vouch for the firm's accounting statements
31. Asset allocation refers to ____________.
A. choosing which securities to hold based on their valuation
B. investing only in "safe" securities
C.the allocation of assets into broad asset classes
D. bottom-up analysis
E. top-down analysis
32. Security selection refers to ____________.
A.choosing which securities to hold based on their valuation
B. investing only in "safe" securities
C. the allocation of assets into broad asset classes
D. top-down analysis
E. moving assets between stocks and bonds
33. Which of the following portfolio construction methods starts with security analysis?
A. Top-down
B.Bottom-up
C. Middle-out
D. Buy and hold
E. Asset allocation
34. Which of the following portfolio construction methods starts with asset allocation?
A.Top-down
B. Bottom-up
C. Middle-out
D. Buy and hold

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E. Asset allocation
35. _______ are examples of financial intermediaries.
A. Commercial banks
B. Insurance companies
C. Investment companies
D. Credit unions
E.Commercial banks, insurance companies, investment companies, and credit unions
36. Financial intermediaries exist because small investors cannot efficiently ________.
A. diversify their portfolios
B. assess credit risk of borrowers
C. advertise for needed investments
D.diversify their portfolios, assess credit risk of borrowers, or advertise for needed investments
E. diversify their portfolios or assess credit risk of borrowers.
37. ________ specialize in helping companies raise capital by selling securities.
A. commercial bankers
B.investment bankers
C. investment issuers
D. credit raters
E. commercial bankers, investment bankers, investment issuers, and credit raters
38. Commercial banks differ from other businesses in that both their assets and their liabilities
are mostly
A. illiquid.
B.financial.
C. real.
D. owned by the government.

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E. regulated.
39. In 2009, ____________ was the most significant financial asset of U.S. commercial banks in
A.loans and leases
B. cash
C. real estate
D. deposits
E. investment securities
40
In 2009, ____________ was the most significant real asset of U.S. nonfinancial businesses in
A. equipment and sofware
B. inventory
C.real estate
D. trade credit
E. marketable securities
41. In 2009, ____________ was the least significant real asset of U.S. nonfinancial businesses in
A. equipment and sofware
B.inventory
C. real estate
D. trade credit
42. In 2009, ____________ was the least significant liability of U.S. nonfinancial businesses in
A. bonds and mortgages

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B.loans
C. inventories
D. trade debt
43. In terms of total value, the most significant liability of U.S. nonfinancial businesses in 2009
was _______.
A. loans
B.bonds and mortgages
C. trade debt
D. other loans
44. In 2009, ____________ was the least significant financial asset of U.S. nonfinancial
businesses in terms of total value.
A.cash and deposits
B. trade credit
C. trade debt
D. inventory
45. New issues of securities are sold in the ________ market(s).
A.primary
B. secondary
C. over the counter
D. primary and secondary
E. primary and over the counter
46. Investors trade previously issued securities in the ________ market(s).

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A. primary
B.secondary
C. primary and secondary
D. derivatives
E. primary and derivatives
47. Investment bankers perform the following role(s) ___________.
A. market new stock and bond issues for firms
B. provide advice to the firms as to market conditions, price, etc
C. design securities with desirable properties
D. make trades for small investors
E.market new stock and bond issues for firms, provide advice to the firms as to market
conditions,price, etc, and design securities with desirable propertiesInvestment bankers market
new stock and bond issues for firms, provide advice to the firms as to market conditions, price,
etc, and design securities with desirable properties.
48. Until 1999, the ________ Act(s) prohibited banks in the United States from both accepting
deposits and underwriting securities.
A. Sarbanes-Oxley
B.Glass-Steagall
C. SEC
D. Sarbanes-Oxley and SEC
E. Fair Credit
49. The spread between the LIBOR and the Treasury-bill rate is called the ________.
A. term spread
B. T-bill spread
C. LIBOR spread
D.TED spread

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E. FRED spread
50. Mortgage-backed securities were created when ________ began buying mortgage loans
from originators and bundling them into large pools that could be traded like any other financial
asset.
A. GNMA
B. FNMA
C. FHLMC
D.FNMA and FHLMC
E. GNMA and FNMA
51. The sale of a mortgage portfolio by setting up mortgage pass-through securities is an

example of ________.
A. credit enhancement
B.securitization
C. unbundling
D. derivatives
E. a Ponzi scheme
52. Which of the following is true about mortgage-backed securities?I) They aggregate
individual home mortgages into homogeneous pools.II) The purchaser receives monthly interest
and principal payments received from payments made on the pool.III) The banks that originated
the mortgages maintain ownership of them.IV) The banks that originated the mortgages
continue to service them.
A. II, III, and IV
B.I, II, and IV
C. II and IV
D. I, III, and IV
E. I, II, III, and IV

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53. ________ were designed to concentrate the credit risk of a bundle of loans on one class of
investor, leaving the other investors in the pool relatively protected from that risk.
A. Stocks
B. Bonds
C. Derivatives
D.Collateralized debt obligations
E. TIPS.
CHAPTER 2
1. Which of the following is/are not characteristic of a money market instrument?
A. Liquidity
B. Marketability
C. Long maturity
D. Liquidity premium
E.Long maturity and liquidity premium
2. You sold a futures contract on oats at a futures price of 233.75 and at the time of expiration
the price was 261.25. What was your profit or loss?
A. $1375.00
B.-$1375.00
C. -$27.50
D. $27.50
E. $1325.00
3. Treasury Inflation-Protected Securities (TIPS)
A. pay a fixed interest rate for life.
B. pay a variable interest rate that is indexed to inflation.
C. provide a constant stream of income in real (inflation-adjusted) dollars.

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D. have their principal adjusted in proportion to the Consumer Price Index.
E.provide a constant stream of income in real (inflation-adjusted) dollars and D have their
principaladjusted in proportion to the Consumer Price Index.
4. Which one of the following is not a money market instrument?
A. A Treasury bill
B. A negotiable certificate of deposit
C. Commercial paper
D.A Treasury bond
E. A Eurodollar account
5. T-bills are financial instruments initially sold by ________ to raise funds.
A. commercial banks
B.the U.S. government
C. state and local governments
D. agencies of the federal government
E. the U.S. government and agencies of the federal government
6. The bid price of a T-bill in the secondary market is
A. the price at which the dealer in T-bills is willing to sell the bill.
B.the price at which the dealer in T-bills is willing to buy the bill.
C. greater than the asked price of the T-bill.
D. the price at which the investor can buy the T-bill.
E. never quoted in the financial press.
7. The smallest component of the money market is
A. repurchase agreements
B.small-denomination time deposits
C. savings deposits

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D. money market mutual funds
E. commercial paper
8. The smallest component of the bond market is
A. Treasury
B.other asset-backed
C. corporate
D. tax-exempt
E. mortgage-backed
9. The largest component of the bond market is
A. Treasury
B. asset-backed
C. corporate
D. tax-exempt
E.mortgage-backed
10. Which of the following is not a component of the money market?
A. Repurchase agreements
B. Eurodollars
C.Real estate investment trusts
D. Money market mutual funds
E. Commercial paper
11. Commercial paper is a short-term security issued by ________ to raise funds.
A. the Federal Reserve Bank
B. commercial banks
C.large, well-known companies

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D. the New York Stock Exchange
E. state and local governments
12. Which one of the following terms best describes Eurodollars?
A. Dollar-denominated deposits in European banks.
B. Dollar-denominated deposits at branches of foreign banks in the U.S.
C.Dollar-denominated deposits at foreign banks and branches of American banks outside the
U.S.
D. Dollar-denominated deposits at American banks in the U.S.
13. Deposits of commercial banks at the Federal Reserve Bank are called __________.
A. bankers' acceptances
B. repurchase agreements
C. time deposits
D.federal funds
E. reserve requirements
14. The interest rate charged by banks with excess reserves at a Federal Reserve Bank to banks
needing overnight loans to meet reserve requirements is called the _________.
A. prime rate
B. discount rate
C.federal funds rate
D. call money rate
E. money market rate
15. Which of the following statements is (are) true regarding municipal bonds?I) A municipal
bond is a debt obligation issued by state or local governments.II) A municipal bond is a debt
obligation issued by the federal government.III) The interest income from a municipal bond is
exempt from federal income taxation.IV) The interest income from a municipal bond is exempt
from state and local taxation in the issuing state.

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A. I and II only
B. I and III only
C. I, II, and III only
D.I, III, and IV only
E. I and IV only
16. Which of the following statements is true regarding a corporate bond?
A. A corporate callable bond gives the holder the right to exchange it for a specified number of
the company's common shares.
B. A corporate debenture is a secured bond.
C. A corporate indenture is a secured bond.
D.A corporate convertible bond gives the holder the right to exchange the bond for a specified
number of the company's common shares.
E. Holders of corporate bonds have voting rights in the company.
17. In the event of the firm's bankruptcy
A. the most shareholders can lose is their original investment in the firm's stock.
B. common shareholders are the first in line to receive their claims on the firm's assets.
C. bondholders have claim to what is lef from the liquidation of the firm's assets afer paying
the shareholders.
D. the claims of preferred shareholders are honored before those of the common shareholders.
E.the most shareholders can lose is their original investment in the firm's stock and the claims
ofpreferred shareholders are honored before those of the common shareholders.
18. Which of the following is true regarding a firm's securities?
A. Common dividends are paid before preferred dividends.
B. Preferred stockholders have voting rights.
C.Preferred dividends are usually cumulative.
D. Preferred dividends are contractual obligations.

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E. Common dividends usually can be paid if preferred dividends have been skipped.
19. Which of the following is true of the Dow Jones Industrial Average?
A. It is a value-weighted average of 30 large industrial stocks.
B. It is a price-weighted average of 30 large industrial stocks.
C. The divisor must be adjusted for stock splits.
D. It is a value-weighted average of 30 large industrial stocks and The divisor must be adjusted
for stock splits.
E.It is a price-weighted average of 30 large industrial stocks and The divisor must be adjusted for
stocksplits.
20. Which of the following indices is (are) market-value weighted?I) The New York Stock
Exchange Composite IndexII) The Standard and Poor's 500 Stock IndexIII) The Dow Jones
Industrial Average
A. I only
B.I and II only
C. I and III only
D. I, II, and III
E. II and III only
21. The Dow Jones Industrial Average (DJIA) is computed by:
A. adding the prices of 30 large "blue-chip" stocks and dividing by 30.
B. calculating the total market value of the 30 firms in the index and dividing by 30.
C.adding the prices of the 30 stocks in the index and dividing by a divisor.
D. adding the prices of the 500 stocks in the index and dividing by a divisor.
E. adding the prices of the 30 stocks in the index and dividing by the value of these stocks as of
somebase date period.
22. The price-weighted index constructed with the three stocks is
A. 30

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B.40
C. 50
D. 60
E. 70
23. The value-weighted index constructed with the three stocks using a divisor of 100 is
A. 1.2
B. 1200
C.490
D. 4900
E. 49
24. Assume at these prices the value-weighted index constructed with the three stocks is 490.
What would the index be if stock B is split 2 for 1 and stock C 4 for 1?
A. 265
B. 430
C. 355
D.490
E. 1000
25. The price quotations of Treasury bonds in the Wall Street Journal show an ask price of
104:08 and a bid price of 104:04. As a buyer of the bond what is the dollar price you expect to
pay?
A. $1,048.00
B.$1,042.50
C. $1,044.00
D. $1,041.25
E. $1,040.40

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26. The price quotations of Treasury bonds in the Wall Street Journal show an ask price of
104:08 and a bid price of 104:04. As a seller of the bond what is the dollar price you expect to
pay?
A. $1,048.00
B. $1,042.50
C.$1,041.25
D. $1,041.75
E. $1,040.40
27. An investor purchases one municipal and one corporate bond that pay rates of return of 8%
and 10%, respectively. If the investor is in the 20% marginal tax bracket, his or her afer tax rates
of return on the municipal and corporate bonds would be ________ and ______, respectively.
A. 8% and 10%
B.8% and 8%
C. 6.4% and 8%
D. 6.4% and 10%
28. An investor purchases one municipal and one corporate bond that pay rates of return of
7.5% and 10.3%, respectively. If the investor is in the 25% marginal tax bracket, his or her afer
tax rates of return on the municipal and corporate bonds would be ________ and ______,
respectively.
A. 7.5% and 10.3%
B.7.5% and 7.73%
C. 5.63% and 7.73%
D. 5.63% and 10.3%
E. 10% and 10%
29. If a Treasury note has a bid price of $975, the quoted bid price in the Wall Street Journal
would be
A. 97:50.

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B.97:16.
C. 97:80.
D. 94:24.
E. 97:75.
30. If a Treasury note has a bid price of $995, the quoted bid price in the Wall Street Journal
would be
A. 99:50.
B.99:16.
C. 99:80.
D. 99:24.
E. 99:32.
31. In calculating the Standard and Poor's stock price indices, the adjustment for stock split
occurs:
A. by adjusting the divisor.
B.automatically.
C. by adjusting the numerator.
D. quarterly, on the last trading day of each quarter.
E. none of the above.
32. Which of the following statements regarding the Dow Jones Industrial Average (DJIA) is
false?
A. The DJIA is not very representative of the market as a whole.
B. The DJIA consists of 30 blue chip stocks.
C.The DJIA is affected equally by changes in low and high priced stocks.
D. The DJIA divisor needs to be adjusted for stock splits.
E. The value of the DJIA is much higher than individual stock prices.

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33. The index that includes the largest number of actively traded stock is:
A. the NASDAQ Composite Index.
B. the NYSE Composite Index.
C.the Wilshire 5000 Index.
D. the Value Line Composite Index.
E. the Russell Index.
34. A 5.5% 20-year municipal bond is currently priced to yield 7.2%. For a taxpayer in the 33%
marginal tax bracket, this bond would offer an equivalent taxable yield of:
A. 8.20%.
B.10.75%.
C. 11.40%.
D. 4.82%.
E. none of the above.
35. If the market prices of each of the 30 stocks in the Dow Jones Industrial Average (DJIA) all
change by the same percentage amount during a given day, which stock will have the greatest
impact on the DJIA?
A.The stock trading at the highest dollar price per share.
B. The stock having the greatest amount of debt in its capital structure.
C. The stock having the greatest amount of equity in its capital structure.
D. The stock having the lowest volatility.
E. None of the above.
36. The stocks on the Dow Jones Industrial Average
A. have remained unchanged since the creation of the index.
B. include most of the stocks traded on the NYSE.
C.are changed occasionally as circumstances dictate.

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D. consist of stocks on which the investor cannot lose money.
E. are relatively small stocks.
37. Federally sponsored agency debt
A. is legally insured by the U.S. Treasury.
B. would probably be backed by the U.S. Treasury in the event of a near-default.
C. has a small positive yield spread relative to U.S. Treasuries.
D.would probably be backed by the U.S. Treasury in the event of a near-default and has a small
positive yield spread relative to U.S. Treasuries.
E. is legally insured by the U.S. Treasury and has a small positive yield spread relative to U.S.
Treasuries.
38. Brokers' calls
A. are funds used by individuals who wish to buy stocks on margin.
B. are funds borrowed by the broker from the bank, with the agreement to repay the bank
immediately if requested to do so.
C. carry a rate that is usually about one percentage point lower than the rate on U.S. T-bills.
D.are funds used by individuals who wish to buy stocks on margin and are funds borrowed by
the broker from the bank, with the agreement to repay the bank immediately if requested to do
so.
E. are funds used by individuals who wish to buy stocks on margin and carry a rate that is
usually aboutone percentage point lower than the rate on U.S. T-bills.Brokers' calls are funds
borrowed from banks by brokers and loaned to investors in margin accounts.
39. A form of short-term borrowing by dealers in government securities is
A. reserve requirements.
B.repurchase agreements.
C. banker's acceptances.
D. commercial paper.
E. brokers' calls.

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40. Which of the following securities is a money market instrument?
A. Treasury note.
B. Treasury bond.
C. Municipal bond.
D.Commercial paper.
E. Mortgage security.
41. The yield to maturity reported in the financial pages for Treasury securities
A. is calculated by compounding the semiannual yield.
B. is calculated by doubling the semiannual yield.
C. is also called the bond equivalent yield.
D. is calculated as the yield-to-call for premium bonds.
E.is calculated by doubling the semiannual yield and is also called the bond equivalent yield.
42. In order for you to be indifferent between the afer tax returns on a corporate bond paying
8.5% and a tax-exempt municipal bond paying 6.12%, what would your tax bracket need to be?
A. 33%
B. 72%
C. 15%
D.28%
E. Cannot tell from the information given
43. What does the term "negotiable" mean with regard to negotiable certificates of deposit?
A.The CD can be sold to another investor if the owner needs to cash it in before its maturity
date.
B. The rate of interest on the CD is subject to negotiation.
C. The CD is automatically reinvested at its maturity date.
D. The CD has staggered maturity dates built in.

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E. The interest rate paid on the CD will vary with a designated market rate.
44. Freddie Mac and Ginnie Mae were organized to provide
A. a primary market for mortgage transactions.
B.liquidity for the mortgage market.
C. a primary market for farm loan transactions.
D. liquidity for the farm loan market.
E. a source of funds for government agencies.
45. The type of municipal bond that is used to finance commercial enterprises such as the
construction of a new building for a corporation is called
A. a corporate courtesy bond.
B. a revenue bond.
C. a general obligation bond.
D. a tax anticipation note.
E.an industrial development bond.
46. Suppose an investor is considering a corporate bond with a 7.17% before-tax yield and a
municipal bond with a 5.93% before-tax yield. At what marginal tax rate would the investor be
indifferent between investing in the corporate and investing in the muni?
A. 15.4%
B. 23.7%
C. 39.5%
D.17.3%
E. 12.4%
47. Which of the following are characteristics of preferred stock?I) It pays its holder a fixed
amount of income each year, at the discretion of its managers.II) It gives its holder voting power
in the firm.III) Its dividends are usually cumulative.IV) Failure to pay dividends may result in
bankruptcy proceedings.

lOMoARcPSD|11389318
A. I, III, and IV
B. I, II, and III
C.I and III
D. I, II, and IV
E. I, II, III, and IV
48. Bond market indexes can be difficult to construct because
A. they cannot be based on firms' market values.
B.bonds tend to trade infrequently, making price information difficult to obtain.
C. there are so many different kinds of bonds.
D. prices cannot be obtained for companies that operate in emerging markets.
E. corporations are not required to disclose the details of their bond issues.
49. With regard to a futures contract, the long position is held by
A. the trader who bought the contract at the largest discount.
B. the trader who has to travel the farthest distance to deliver the commodity.
C. the trader who plans to hold the contract open for the lengthiest time period.
D.the trader who commits to purchasing the commodity on the delivery date.
E. the trader who commits to delivering the commodity on the delivery date.
9% and a tax-exempt municipal bond paying 7%, what would your tax bracket need to be?
A. 17.6%
B. 27%
C.22.2%
D. 19.8%

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7% and a tax-exempt municipal bond paying 5.5%, what would your tax bracket need to be?
A. 22.6%
B.21.4%
C. 26.2%
D. 19.8%
52. An investor purchases one municipal and one corporate bond that pay rates of return of 6%
and 8%, respectively. If the investor is in the 25% marginal tax bracket, his or her afer tax rates
of return on the municipal and corporate bonds would be ________ and ______, respectively.
A. 6% and 8%
B. 4.5% and 6%
C. 4.5% and 8%
D.6% and 6%
E. None of the above
53. An investor purchases one municipal and one corporate bond that pay rates of return of
7.2% and 9.1%, respectively. If the investor is in the 15% marginal tax bracket, his or her afer
tax rates of return on the municipal and corporate bonds would be ________ and ______,
respectively.
A. 7.2% and 9.1%
B.7.2% and 7.735%
C. 6.12% and 7.735%
D. 8.471% and 9.1%
E. None of the above
54. For a taxpayer in the 25% marginal tax bracket, a 20-year municipal bond currently yielding
5.5% would offer an equivalent taxable yield of:
A.7.33%.

lOMoARcPSD|11389318
B. 10.75%.
C. 5.5%.
D. 4.125%.
E. 6.45%.
55. For a taxpayer in the 15% marginal tax bracket, a 15-year municipal bond currently yielding
6.2% would offer an equivalent taxable yield of:
A. 6.2%.
B. 5.27%.
C. 8.32%.
D.7.29%.
E. 7.62%.
56. With regard to a futures contract, the short position is held by
A. the trader who bought the contract at the largest discount.
B. the trader who has to travel the farthest distance to deliver the commodity.
C. the trader who plans to hold the contract open for the lengthiest time period.
D. the trader who commits to purchasing the commodity on the delivery date.
E.the trader who commits to delivering the commodity on the delivery date.
57. A call option allows the buyer to
A. sell the underlying asset at the exercise price on or before the expiration date.
B. buy the underlying asset at the exercise price on or before the expiration date.
C. sell the option in the open market prior to expiration.
D. sell the underlying asset at the exercise price on or before the expiration date and sell the
option in the open market prior to expiration.
E.buy the underlying asset at the exercise price on or before the expiration date and sell the
option inthe open market prior to expiration.

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58. A put option allows the holder to
A. buy the underlying asset at the strike price on or before the expiration date.
B. sell the underlying asset at the strike price on or before the expiration date.
C. sell the option in the open market prior to expiration.
D.sell the underlying asset at the strike price on or before the expiration date and sell the option
in the open market prior to expiration.
E. buy the underlying asset at the strike price on or before the expiration date and sell the
option in the open market prior to expiration.
59. The ____ index represents the performance of the ____ stock market.
DAX - German
Nikkei - Japanese
FTSE - U.K.
Hang Seng - Hong Kong.
TSX - Canadian
64. The ultimate stock index in the U.S. is the Wilshire 5000.
65. The DJIA is an example of a U.S. index of large firms.
66. The Russell 2000 is an example of a U.S. index of small firms.
67. The largest component of the money market is ____________.
A. repurchase agreements
B. money market mutual funds
C. T-bills
D. Eurodollars
E.savings deposits
68. Certificates of deposit are insured by the ____________.
A. SPIC

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B. CFTC
C. Lloyds of London
D.FDIC
E. AIG
69. Certificates of deposit are insured for up to ____________ in the event of bank insolvency.
A. $10,000
B.$100,000
C. $50,000
D. $500,000
E. 10,000,000
70. The maximum maturity of commercial paper that can be issued without SEC registration is
______.
A.270 days
B. 180 days
C. 90 days
D. 30 days
E. 15 days
71. Which of the following is used extensively in foreign trade when the creditworthiness of one
trader is unknown to the trading partner?
A. Repos
B.Bankers' acceptances
C. Eurodollars
D. Federal funds
E. Reverse repos
72. A US dollar denominated bond that is sold in Singapore is a ____________.

lOMoARcPSD|11389318
A.Eurobond
B. Yankee bond
C. Samurai bond
D. Bulldog bond
E. Singapore Sling
73. A municipal bond issued to finance an airport, hospital, turnpike, or port authority is
typically a ____.
A.revenue bond
B. general obligation bond
C. industrial development bond
D. needed services bond
E. health and trade bond
74. Unsecured bonds are called ____________.
A. junk bonds
B. debentures
C. indentures
D. subordinated debentures
E.either debentures or subordinated debentures
75. A bond that can be retired prior to maturity by the issuer is a ____________ bond.
A. convertible
B. secured
C. unsecured
D.callable
E. Yankee

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76. Corporations can exclude ____________ percent of the dividends received from preferred
stock from taxes.
A. 50
B.70
C. 20
D. 15
E. 62
77. You purchased a futures contract on corn at a futures price of 350 and at the time of
expiration the price was 352. What was your profit or loss?
A. $2.00
B. -$2.00
C.$100
D. -$100
E. $75.00
78. You purchased a futures contract on corn at a futures price of 331 and at the time of
expiration the price was 343. What was your profit or loss?
A. -$12.00
B. $12.00
C. -$600
D.$600
E. $75.00
79. You sold a futures contract on corn at a futures price of 350 and at the time of expiration the
price was 352. What was your profit or loss?
A. $2.00
B. -$2.00
C. $100

lOMoARcPSD|11389318
D.-$100
E. $67.50
80. You sold a futures contract on corn at a futures price of 331 and at the time of expiration the
price was 343. What was your profit or loss?
A. -$12.00
B. $12.00
C.-$600
D. $600
E. $67.50

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Studocu is not sponsored or endorsed by any college or university

1. The material wealth of a society is a function of _________.

A. all financial assets

B.all real assets

C. all financial and real assets

D. all physical assets

2. _______ is/are a real asset(s).

C. Only stocks and bonds

E.Land, machines and knowledge are real assets

4. _______ is/are financial assets.

D.Stocks and bonds

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5. _________ financial asset(s).

D. U.S. Agency bonds are

E.Derivatives and U.S. Agency bonds are

6. Financial assets ______.

A. directly contribute to the country's productive capacity

B.indirectly contribute to the country's productive capacity

C. contribute to the country's productive capacity both directly and indirectly

D. do not contribute to the country's productive capacity either directly or indirectly

E. are of no value to anyone

A. consumer durables and semi-durables

C. life insurance reserves

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D.debt securities and other

E. pension fund reserves

C. debt securities and other

D. life insurance reserves

C. debt securities and other

D. life insurance reserves

E. pension fund reserves

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B. Life insurance reserves

D. Debt securities and other

D. consumer durables and semi-durables

D. consumer durables and semi-durables

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17. A fixed-income security pays ____________.

A. a fixed level of income for the life of the owner

C. a variable level of income for owners on a fixed income

D. a fixed or variable income stream at the option of the owner

E. a riskless return that is fixed for life

18. A debt security pays ____________.

A. a fixed level of income for the life of the owner

B. a variable level of income for owners on a fixed income

C. a fixed or variable income stream at the option of the owner

E. a riskless return that is fixed for life

19. Money market securities ____________.

A. are short term

B. are highly marketable

C. are generally very low risk

E. highly marketable and generally very low risk

20. An example of a derivative security is/are ______.

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A. a common share of Microsof

C.a commodity futures contract and a call option on Intel stock

D. a call option on Intel stock and an Intel bond

E. a common share of Intel stock

21. The value of a derivative security _______.

A.depends on the value of the related security

C. is unrelated to the value of the related security

E. enhance their balance sheets.